Filed 9/4/15; Part. Pub. & Second Mod. Order 9/25/15 (See End of Opn.)

Filed 9/4/15; part. pub. & second mod. order 9/25/15 (see end of opn.)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

CALIFORNIA SCHOOL BOARDS ASSOCIATION ET AL.,
Petitioners and Respondents,
v.
STATE BOARD OF EDUCATION,
Respondent and Appellant;
ASPIRE PUBLIC SCHOOLS, INC.,
Real Party in Interest / A136327
(Alameda County
Super. Ct. No. RG07353566)

THE COURT:

The written opinion, which was filed on September4, 2015, is modified as follows:

In the first full paragraph on page 12 of the opinion, the quote that reads:

“The power to change the boundaries of the [school] district, as well as to define them in the first instance, is of legislative origin, and, whether exercised immediately by the Legislature or immediately by a board of supervisors—the local legislature—is, whenever exercised, a legislative act.”

Shall be changed to:

“The power to change the boundaries of the [school] district, as well as to define them in the first instance, is of legislative origin, and, whether exercised immediately by the Legislature or mediately by a board of supervisors—the local legislature—is, whenever exercised, a legislative act.”

This modification does not effect any change in judgment.

Dated: ______, Acting P. J.

Filed 9/4/15 (unmodified version)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

Section 47605.8 of the Education Code[1] authorizes the State Board of Education to grant (or deny) an application for a “state charter school.”[2] Subdivision(a) of the statute directs the Board of Education to “adopt regulations, pursuant to the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) ... of the Government Code) for the implementation of this section.” The statute further directs that the “[r]egulations adopted pursuant to this section shall ensure that a [state] charter school ... meets the requirements otherwise imposed on charter schools....” (§47605.8, subd.(a).)

It is the reference to “Chapter 5 (commencing with Section11500)” in the statute that engenders the question before us on appeal.

Chapter5 of the Administrative Procedure Act (APA) governs quasi-judicial proceedings, that is, it prescribes standards for adjudicatory proceedings undertaken by a governmental agency. (Gov. Code §11501, subd.(b).) These include, for example, a written accusation or statement of issues, notice of right to a hearing, testimony under oath, cross-examination, and a written decision. (Gov. Code §§11503; 11504; 11505; 11509; 11511; 11513.)

A different part of the APA, Chapter 3.5, commencing with section11340 of the Government Code, governs the rulemaking process of a state agency, that is, it prescribes the “minimum procedural requirements” for adopting substantive regulations to carry out the agency’s statutory authority. (Gov. Code §11346.) These include, for example, notice to the public and affected business and industry groups of the proposed regulations, opportunity for oral and written presentations by the public and any interested persons or entities, and notice of the date and time of the proceeding at which the proposed regulations will be considered. (Gov. Code §§11346.2–11346.9.)

In this case, the question is whether the reference to the adjudicatory provisions of the APA in section 47605.8 was intentional or erroneous. The State Board of Education (the Board), and Amicus Curiae California Charter Schools Association contend the reference was a drafting error. They argue that, in directing the Board to “implement” the statute, the Legislature intended to refer to the provisions of the APA governing the rulemaking process. The California School Boards Association and others, argue—and the trial court agreed—that the statutory language is plain and can be neither rewritten nor disregarded.

We agree with the Board for three reasons: First, the statute in question governs the approval or denial of a charter school application, which is a quasi-legislative function—requiring consideration of policy questions and the opportunity for public input—and therefore is fundamentally at odds with the adjudicatory procedures mandated by Government Code section11500 et seq. Second, legislative directives to adopt regulations for the implementation of a statute invariably call for a rulemaking process pursuant to Government Code section11340 et seq.; the reference to the APA’s adjudicatory provisions in section47605.8 is therefore a complete anomaly. Third, the use of an adjudicatory proceeding to approve or deny state charters pursuant to section47605.8 would be inconsistent with all other like provisions in the Charter School Act, none of which entail quasi-judicial proceedings.

Accordingly, we reverse the judgment and remand the matter for further proceedings.

I. PROCEDURAL BACKGROUND

This is the second appeal in a long-running dispute between the California School Boards Association (CSBA), the California Teachers Association (CTA), the Association of California School Administrators (ASCA), and the Stockton Unified School District (collectively, petitioners) on the one hand, and the Board and Aspire Public Schools (Aspire), a charter school entity, on the other. The dispute originally centered on the Board’s approval of a state charter for Aspire.[3]

Although the question before us is one of pure statutory construction, a description of the procedural history will provide some necessary context for understanding the parties’ arguments. To set the stage, we first recite the text of the statute at issue.

A.The Statute

The relevant provisions of section 47605.8 are as follows:

“(a)A petition for the operation of a state charter school may be submitted directly to the state board, and the state board shall have the authority to approve a charter for the operation of a state charter school that may operate at multiple sites throughout the state. The State Board of Education shall adopt regulations, pursuant to the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code) for the implementation of this section. Regulations adopted pursuant to this section shall ensure that a charter school approved pursuant to this section meets all requirements otherwise imposed on charter schools pursuant to this part, except that a state charter school approved pursuant to this section shall not be subject to the geographic and site limitations otherwise imposed on charter schools.... [¶](b)The state board shall not approve a petition for the operation of a state charter school pursuant to this section unless the state board makes a finding, based on substantial evidence, that the proposed state charter school will provide instructional services of statewide benefit that cannot be provided by a charter school operating in only one school district, or only in one county. The finding of the state board in this regard shall be made part of the public record of the proceedings of the state board and shall precede the approval of the charter. [¶]... [¶](d)The state board shall not be required to approve a petition for the operation of a state charter school, and may deny approval based on any of the reasons set forth in subdivision(b) of Section47605.6.”[4]

B.The Original Administrative Proceedings

Ten years ago, Aspire submitted a petition to the Board for a state charter, pursuant to the provisions of section47605.8. Prior to the submission of Aspire’s petition, the chair of the Advisory Commission on Charter Schools (ACCS)—an advisory body to the Board—reviewed a draft of the petition and provided advice to Aspire’s chief executive officer on how the petition could be reworked to meet statutory requirements and garner the Board’s support. Aspire’s petition was also reviewed by staff of the California Department of Education (the Department) and by the ACCS as a whole. In 2005, and again in 2006, the ACCS favorably considered Aspire’s petition at public meetings, after which the petition and the Department’s staff report were forwarded to the Board. The report discussed the strengths and weaknesses of the petition and recommended a number of conditions of approval.

The Board considered Aspire’s petition at its January2007 meeting, which was attended by Aspire’s chief executive officer, as well as other interested persons who spoke in favor of and against the petition. The Board’s deliberations focused primarily on how to interpret the statute’s language requiring a finding that the “school will provide instructional services of statewide benefit that cannot be provided by a charter school operating in only one school district, or only in one county.” (§47605.8, subd.(b).) The Board members did not all agree on what was intended by that language, but Aspire’s charter petition was approved by a majority of the Board, subject to the conditions proposed by the Department’s staff.

Aspire signed a Memorandum of Understanding (MOU) that included many pages of detailed requirements to be completed before the schools became operational. Aspire thereafter opened at least two schools under the charter, and petitioners filed this action.

C.The Original Judicial Proceedings

The petition and complaint rested on three claims sounding in traditional mandamus. (Code Civ. Proc., §1085.)

In the first cause of action, petitioners alleged that the Board abused its discretion in approving Aspire’s state charter based on a finding that Aspire’s proposal would confer statewide benefits that could not be provided by operating in only one school district or only one county. Petitioners alleged that the finding made by the Board was based on an erroneous construction of the statute, and that it was not supported by any evidence. Petitioners requested a writ of mandate ordering the Board to vacate the approval of Aspire’s petition and to comply with the provisions of section47605.8 with respect to future state charter applications.

In the second cause of action, petitioners alleged that the Board had a clear, present, and ministerial duty to enforce the conditions imposed on Aspire’s charter and contained in the MOU, and that it failed to do so. They further alleged that this failure, and the Board’s failure to rescind the charter when the conditions were not satisfied, entitled petitioners to a writ of mandate ordering the Board to vacate its authorization of Aspire’s charter and to refrain from authorizing the opening of state charter schools in the future unless and until the conditions of approval imposed on the charters are met.

In the third cause of action, petitioners alleged that the Board “has never adopted regulations governing the process of review or the role of the ACCS with respect to statewide charter petition review. Specifically, the use of the ACCS to review and make recommendations with respect to statewide charter petitions has never been subject to the rulemaking requirements of the [APA] and its public comment provisions. Nor has [the Board] ever adopted regulations setting forth the process to be used for ACCS (or other) review of petitions for statewide charters, for hearings on those petitions, for amendments to petitions, for objections to such petitions, or for making decisions with respect to such petitions.” Petitioners sought an order mandating that the Board rescind Aspire’s charter because it had been approved using policies and procedures that were not in compliance with the APA. Petitioners asked the court to order the Board “to refrain from using policies and procedures for consideration of future petitions unless such policies and procedures have been promulgated in compliance with the requirements of the [APA].”[5]

Aspire and the Board filed serial demurrers to the various causes of action, which were sustained. The trial court disagreed with petitioners’ interpretation of the statute governing the approval of state charter petitions, rejected petitioners’ contentions that the Board had a clear, present, and ministerial duty to enforce the conditions of approval, and concluded that petitioners had not alleged facts sufficient to state a claim that the Board was using policies and procedures that were not APA-compliant. The trial court entered judgment dismissing the action, and petitioners appealed.

D.The Original Appeal

We reversed the trial court with respect to all issues.

First, we concluded that petitioners’ interpretation of section47605.8 was correct and the Board’s interpretation incorrect. The Board had construed the statute to mean this: Before approving a state charter, the Board must find that the school will provide a statewide benefit that cannot be provided “through a charter that only allows the [applicant] to operate in one location.” (CSBA, supra, 186 Cal.App.4th at p.1316.) We perused the legislative history reflecting the Legislature’s concern about historical problems with charter schools that were operating in widely dispersed locations under a single charter. Based on our understanding of the legislative intent, we held that the statutory scheme favored local charters and allowed statewide charters to be approved only if the Board could make a finding that the statewide benefits of the charter could not be achieved through a series of local charters.

Second, we concluded that petitioners’ pursuit of a writ of mandate requiring the Board to enforce Aspire’s conditions of approval was at least theoretically viable.

Third, we concluded that the Board was subject to the rulemaking provisions of the APA (Gov. Code, § 11340 et seq.), and that petitioners had made out a claim, “albeit skeletal,” that the Board had failed to comply with those provisions of the APA. We reasoned that petitioners had alleged facts sufficient toraise a question whether the ACCS used policies and procedures that should have been, but were not, promulgated under the APA’s rulemaking provisions. We refrained, however, from expressing any views on the merits of that question because, if it could be shown that the ACCS’s policies and procedures did not “‘“depart from or embellish upon”’” the statutory language(CSBA, supra, 186 Cal.App.4th at p.1333, citingMorning Star Co. v. State Bd. of Equalization (2006) 186Cal.4th 324, 336), but merely reiterated the statutory and regulatory scheme,then compliance with the rulemaking process would not be required. That question, we concluded, could not be decided on demurrer.

The matter was remanded for further proceedings.

E.Proceedings after Remand

Following the remand, the parties pursued both administrative and judicial remedies.

Within a month of the issuance of the remittitur, Aspire submitted to the Board a proposed “Material Revision to Statewide Benefit Charter Petition” (Material Revision) which, in essence, requested re-approval of the Aspire statewide charter in conformity with the statute as interpreted by this court. Aspire also requested that the Board make a finding that it had complied with all conditions of approval previously imposed on its charter and asked the Board to waive any deadline that Aspire may not have met. Aspire’s Material Revision request was placed on the agenda for the Board’s February 2011 public meeting.

In early February, counsel representing three of the petitioners (CSBA, CTA, and ACSA), delivered to the Board a letter objecting to consideration of Aspire’s proposed Material Revision and requesting that the board take no action on any statewide charters until the Board adopted regulations to implement the statutory requirements for statewide charters, and established a “clear, transparent process for considering statewide benefit charter petitions.” Ultimately, Aspire’s item was not considered by the Board in February for reasons not elucidated in the record. The Board did, however, vote unanimously to proceed with amendments to existing regulations to “revise the requirements for statewide benefit charters.”

In the meantime, the case proceeded in court; the parties filed case management statements and the Board and Aspire filed their Answers to the Petition and Complaint. A case management conference was held in April.

On the administrative side, Aspire’s submittal of its Material Revision was returned to the Board’s agenda for consideration in May. This apparently sparked an attempt by petitioners to enjoin the administrative proceedings, which the court rejected.

Petitioners then delivered to the Board “lengthy procedural and substantive arguments and evidence” in opposition to Aspire’s proposal.[6] The Board held a public hearing, and, following the close of public comment, approved the Material Revision. The approval was based on findings that Aspire’s enhanced ability to secure statewide bonds and to expand its teacher residency program constituted “statewide benefits” that could not be provided through a series of local charters. The Board also considered and approved Aspire’s request for a finding that Aspire had complied with all of its previously imposed conditions of approval and for a waiver of any deadlines for compliance that may not have been met.

Back in court, the Board and Aspire filed a motion for summary adjudication, which was denied. Shortly thereafter, petitioners filed points and authorities challenging the approval of the Material Revision. They did not file a supplemental pleading, but proceeded under their original petition for writ of mandate. With regard to the first cause of action, petitioners argued that the approval should be invalidated because there was “no legal or factual basis for the ... finding that [the] proposed instructional services could not be provided through locally approved charters.” This claim was adjudicated below in petitioners’ favor. Since then, this issue has been settled by the parties, and so it is not before us.